"We're Going to Mess With Social Security, Medicare and Medicaid"... Says Erskine Bowles

Submitted by SadInAmerica on Fri, 03/12/2010 - 3:36pm.

Erskine Bowles, co-chairman of the commission on U.S. deficit reduction, said entitlement programs such as Social Security will turn the nation into a "second- rate power" if their costs aren't reduced... 

"We're going to mess with Medicare, Medicaid and Social Security because if you take those off the table, you can't get there," Bowles said today in a speech to North Carolina bankers in Greensboro. "If we don't make those choices, America is going to be a second-rate power and I don't mean in 50 years. I mean in my lifetime."

President Barack Obama created the commission last month, and named Bowles, 64, former Clinton White House chief of staff, and former Wyoming Republican Senator Alan Simpson, 78, to lead the panel. The commission's recommendations to bring the budget deficit down to 3 percent of the economy by 2015 are due Dec. 1.

"All of our revenue is completely consumed by entitlements," Bowles said. "This is today, not some forecast into the future. Every dollar we spend on the military, homeland security, transportation, education and research is borrowed," and half of that comes from foreign sources, he said. "That is a recipe for disaster."

The Obama administration is prodding banks to lend more to small companies to stimulate the economy and provide jobs.

Public debt "is going to crowd small business out of the marketplace and they aren't going to have capital to grow and create jobs," Bowles said. People who say the U.S. must invest more in education, research and transportation should understand "there's not going to be any money for that or anything else unless we get the spending under control," he said.

Value-Added Tax...

Bowles and Simpson have said a value-added tax should be considered.

"A value-added tax ought to be something that's on the table," Bowles said in an interview last month with Bloomberg Television's "Political Capital with Al Hunt." There are "no sacred cows," Simpson said.

Political leaders who say the budget gap can be closed mostly by cutting fraud and abuse in government programs are wrong, Bowles said today.

"Don't listen to them," Bowles said. "We're going to have to make some very tough decisions and we aren't going to come out of this very popular."

Political Risk...

Bowles recently announced his retirement as president of the University of North Carolina system. During the administration of former President Bill Clinton, Bowles also served as director of the Small Business Administration.

House Republican leader John Boehner's suggestion that the group report its findings before the November elections is misguided, Bowles said in an interview after his speech today. "Alan and I agreed that if this was completed before the election, it would become completely politicized," Bowles said.

Illustrating the difficulty of the task, Bowles said his 90-year-old mother, Jessamine Bowles Morris, had expressed pride that Obama named him to co-chair the panel. Then she added, according to Bowles, "Don't you mess with my Medicare."

David Mildenberg - March 9, 2010 - source Bloomberg

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Submitted by SadInAmerica on Fri, 03/12/2010 - 3:36pm.